The Architecture, Engineering and Construction industry is among the top contributors to the global economy. It has the potential to transform our present and future, provided it takes the path of collaboration and adopts geospatial technology, states the 2019 Geospatial Market in the AEC Industry report.
The world we live in is under threat. The ever-growing population has only increased urbanization, overburdening the infrastructure and resources, and posing a serious threat to the future of mankind. Then there is the problem of Climate Change that only adds to the element of uncertainty. Governments and policymakers all over the world are struggling to find ways to ensure a good today and a better tomorrow. In such a scenario, the Architecture, Engineering and Construction (AEC) industry has a crucial role to play in both building and strengthening the modern world.
According to a 2019 research report published by Geospatial Media and Communications titled Geospatial Market in the AEC Industry, “The construction industry is among the top contributors to the world economy with annual revenue of approximately $11.30 trillion, which is roughly 13.31% of the world GDP (2017), employing about 7% of the global workforce.” Evidently, the AEC industry has a direct role to play in the world’s economic growth, and is in a way also responsible for the growth of several other sectors like agriculture, manufacturing and services, as it creates the physical infrastructure required for production and distribution of goods and services. It also has great employment-generation potential, as several industry processes are largely labor-intensive.
Emerging trends in AEC industry
Integrated approach to infrastructure development
An integrated approach means the process of bringing together various components and sub-systems into one functional system. Till sometime back, this system was missing in the AEC industry, which was considered among the most fragmented sectors in the world. However, the industry has witnessed a transformation in recent times, and companies are today focusing on synchronization and cooperation across the value chain. With this approach, they are defining mutual standards and setting new goals. For instance, Australia is pioneering the standardization of project alliance agreements and is adopting a model of cooperative partnership to reduce initial costs.
Nodal institutions are also set up in many countries for national infrastructure planning, policy development and roadmaps for adoption of best practices, technologies and standards. The European Commission and the World Bank, for example, have launched an initiative called Indicative trans-European Transport Network (TEN-T) Investment Action Plan that identifies priority projects in Armenia, Azerbaijan, Belarus, Georgia, Republic of Moldova and Ukraine. Together, these projects will require an estimated investment of almost €13 billion and will include 4,800km of roads and rail lines, six ports and 11 logistics centers. Similarly, China’s Belt and Road Initiative looks at strengthening road and railway infrastructure in Asia, Middle East, Africa and Europe.
Governments have a major stake in the growth of AEC sector. That’s because developing society through solid transport infrastructure like roads, ports, bridges, highways and railways requires huge public sector investments. Since such humongous investments may not be possible at all times for governments, the AEC industry is seeing the emergence of public-private partnerships (PPP). This is a feasible, reliable and viable mode of creating infrastructure in both developed and developing nations. Globally, the share of PPP projects in the overall infrastructure investment ranges from 5% to 10%.
During 2010-2014, the average share of investment in PPP projects in developed G20 economies was 3.1%. It was highest in the United Kingdom and Australia at 15% and 10.9%, respectively. In contrast, the average share of investment in such projects in developing (G20) economies was 7.5%. The investment share in these countries reduced from 8.9% in 2010 to 6.4% in 2014. As of today, China has the lowest share of PPP investment.
According to World Bank statistics, the total private investment in transport infrastructure was worth $69.9 billion in 2015, i.e. 53% higher than the average investment that took place during 2010-2015. Approximately 64% of private investment took place in Europe and Asia, followed by 31% in Latin America and central Asia. While airports account for $38.8 billion of private investment, roads account for $23.5 billion, railways for $5.8 billion and ports $2.3 billion.
Many G20 countries have published concrete national infrastructure plans and project pipelines to help investors get a better understanding of return on investment, payback period, project lifecycle and asset management efficiency. However, regulation and insufficiency of funds with governments are some of the problems encountered in the PPP model.
Digitalization of AEC industry
Today, AEC is the least digitalized sector — traditional methods are still prevalent and technology adoption is low. However, things are changing and digital technologies like BIM, Cloud, Digital Twin, Artificial Intelligence, drones, Augmented Reality, Virtual Reality and Mixed Reality are now being used.
The 2019 Geospatial Market in the AEC Industry report finds that digitalization in building infrastructure helps to save 10%-20% in the entire construction workflow, whereas project time saving is 14%. In transport infrastructure, there is a cost saving of 15%-23% in the design and engineering phase and 8% in the entire construction workflow, whereas time-saving is around 17%. In industrial infrastructure, the total cost saving is 8%-10% in the construction workflow and project time saving is about 8%. Apart from these benefits, digitalization also improves collaboration, enhances clarity and makes construction sites safer.
Geospatial technology in AEC industry
Like in every other sector, geospatial technology is revolutionizing the construction industry too. From planning and designing to building and operating, geospatial technology has a crucial role to play at every stage.
A construction project contains varied information ranging from drawings, layouts, blueprints, schedules to cost estimates and specifications. Often, overlaps and lack of consistency in information leads to construction errors. The overall level of consistency can be enhanced if spatial and non-spatial information is maintained in a single environment and changes are made to these documents at one place. Geospatial technology can help in achieving that by assisting construction managers at each and every level and establishing a clear line of communication between all stakeholders.
The report finds that the use of geospatial technology reduces a project’s maintenance time by 56% and the maintenance cost by 60%. The overall time saving is 92% and project cost saving is 88%.
BIM and GIS
The concept of Building Information Modeling, or simply BIM, has been there for a while. In 1963, Ivan Edward Sutherland, an American computer scientist and Internet pioneer, developed ‘Sketchpad’, the first computer-aided design (CAD) with a graphical user interface. Sketchpad led to human-computer interaction, breaking new ground in modeling programs in the construction industry. During the ‘70s and ‘80s, Sketchpad further established the computational representation of geometry in construction, which enabled display and recording of shape information. But somehow, the industry was not able to utilize the power of BIM.
BIM helps to understand the entire building lifecycle, encompassing design, build and operation from a single, central data store. It enables the integration of data from multiple sources, combines it to form a common operating picture for the entire building lifecycle and enables a comprehensive assessment of the financial and environmental cost of any building project.
When integrated with GIS system, BIM ensures that all the data is stored in a central repository. That way, any data with a common geography can be related to each other and can be assessed at any scale.
Both BIM and geospatial play different roles during construction lifecycle. However, amalgamation of both is necessary so that they communicate with each other to build and operate within the desired infrastructure and communities. Today, many BIM and geospatial solution providers are creating integrated solutions to optimize construction workflows that enable users to access, update and use built-in data in spatial context throughout the construction lifecycle.
Challenges and the way forward
The AEC industry is facing hurdles in finding and retaining talent, responding to material price volatility due to tariffs and other trade-related headwinds, and absorbing the rapid pace of technology advancement. High cost of implementation, lack of standards and unclear policy frameworks coupled with absence of well-established value proposition, skilled human resources are only adding to the industry’s woes. Then there is an inherent resistance to change and the perception that BIM + geospatial technology is only for large projects that are making the scenario all the more complicated.
The industry is in dire need for collaborations. Construction companies and geospatial market stakeholders need to enhance education and training capacity, while the policymakers have to come up with regulations promoting collaboration between all parties to bring digitalization. The industry needs to focus on smaller, relatable examples instead of flagship projects, changing the perception that BIM and geospatial technology is only for big projects. The AEC industry also needs to embrace new age disruptive technologies such as IoT, cloud computing and Virtual Reality to develop innovative solutions.